Thanks Oleg. I guess it being canonistack we probably can assume Precise
on the host. Based on that assumption I also did some tests. And there
found that it is indeed a combination of host kernel / guest kernel
which causes this. Looking at the kernel code there are many places that
can actually exit with -EIO (sadly all without giving any hint about the
specific mismatch that is causing the failure). Those mostly seem to be
concerned with checking MSRs about correct configuration. So the cpuid
flags may be different but at the same time could be just fluke. There
should be ways to influence those in libvirt but now I think this may
not help.

So my finding on the same Hashwell/Sharbay system:
- host 3.2: guest 3.2: ok
- host 3.2: guest 3.16: not ok
- host 3.13: guest: 3.16: ok

So this seems to be some mismatch in what the hosts kvm passes into the
L1 guests vmx msr which in turn the L1 kvm module validates on load. But
since I have now a setup combination that triggers the issue I can
prepare a more verbose kvm-intel module to try locally.

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https://bugs.launchpad.net/bugs/1431473

Title:
  kvm_intel (nested) module will not load [Input/output error]

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